Will Your Health Business Model Survive?

Stress-testing your business for a new policy agenda

Since the election, US stocks are mostly up. Except hospital stocks. Public hospitals like HCA are worth looking at the stock charts to see how wrong we were about the election – rising high the day before, tanking the day after.

HCA Post Election Ticker

Then there are the health insurance companies like Aetna and Cigna are on the rise. United Healthcare is the best-performing stock of the year.

United Healthcare Ticker

The promised repeal of the Affordable Care Act (ACA, a.k.a. Obamacare) is expected to impact hospitals more negatively than insurers. A recent Barrons survey of C-Suite executives in healthcare found that “MCO (Managed Care Organization) executives are more optimistic than acute-care hospital executives about the outlook for the respective fundamentals in their industries.”

But as of today, we only know which way the winds are blowing. We do not know exactly how the ACA will change, or when, or what it specifically means for any given company strategy.

Do the same trends play out if you are a startup? Were your pre-election business model assumptions correct? Does the recent shift in political stance change your trajectory?

In short, yes. No matter what your political views, it’s time to stress test your assumptions, and determine how dependent you are on policy-driven shifts in your future plan.

First, Re-Locate that North Star

Look up from your to-do list, your weekly calendar, your scrum, sprint, or annual operating plan. Why did you get into healthcare in the first place? Answer that question on a personal level. Convene a futuring session with your team.

Has the ACA been positive for your business or are you still struggling to implement technology and systems to manage and measure care? How should healthcare happen? What are your ideas for a better future?

For inspiration, The Institute for the Future published a Health Futures Map to help navigate the post-ACA decade. The Institute for Health Improvement recently partnered with five foundations to produce the Better Care Playbook to help accelerate system transformation. What questions do these future statements and best practices generate for your team?

IFTF Post ACA Care Models

Ask big questions to frame and reframe your company’s direction. What role do you have to play in healthcare transformation driven not by federal policy shifts, but through connections and partnerships with other companies in the healthcare industry, not-for-profit organizations, advocacy groups, and your local community?

Second, Check Your Customer Target Assumptions

Who are your core customer segments? Were you selling to hospitals? Insurance companies? Pharma? Should your priorities shift in preparation for what comes next?

Even if you’re up and running and executing against your defined plan, it’s worth re-engaging in customer discovery. Pick a selection of health systems leaders, clinicians, administrators, and ask everyone how they envision the shift. You may find that your question is the first time they have stopped to pause and think about what is to come.

Third, Re-Validate Your Core Business Model Hypotheses

It’s time to go back to your original business model assumptions. If you haven’t been tracking changes to your assumptions using a Business Model Canvas tool, now is a good time.

Value Proposition Design

List your target customer segments, in order, and based on your customer discovery findings, consider how your core value proposition may need to shift.

Take a hard look at your core resources, activities, and partners – do you need to think about what you do differently?

Lastly, your biggest and boldest question is to re-consider your costs and revenues and stress-test where you fall in the shift to value-based reimbursement.

Fourth: Take a Stand on Value-Based Reimbursement

The hardest element to predict is how and when we start to shift to value-based care, payment based on outcome, rather than traditional fee-for-service.

The shift to value-based payment and care will cause health providers and everyone delivering to the healthcare system to change the way they bill for care. Instead of being paid by the number of visits and tests they order, devices used, and pharmaceuticals prescribed (fee-for service), providers’ payments will start to be based on the value of care they deliver (value-based care).

This shift is happening, but not everywhere. A number of health systems, not-for-profits and health companies and startups have each chosen where to play; with a number of stakeholders claiming bold stakes and risks, and others avoiding the change for as long as they can.

A rollback of key elements of the ACA will affect the contours of this shift, but the “train has left the station” according to many health leaders. Payers are demanding value-based payment models, integrated hospital systems are taking on population risk, and startups are experimenting with pay-for-outcomes and pay-for-performance models. Will you be a leader? Or a follower?

Finally: Rinse, Repeat and Lead

To be sure, those that work inside of healthcare complain that the pace of change is slow and incremental, particularly in front line health delivery systems. Startups have had to play at the edges, selling solutions consumers who can afford to pay, to workplace wellness efforts where ROI can be proven, or are living off of a derivative data-selling business model. Incumbent technology and service vendors are deeply locked in and want to protect their market share and flows of revenue and profit.

But one thing is certain – there is no comfortable status quo in healthcare. Even in the heart of the most cynical, money-minded hospital administrator, there is an acknowledgment that patients matter. The US is an outlier in health, and “not in a good way:”

US Healthcare System

 

If you believe your initiative or technology innovation can bend this curve away from more cost/worse outcome, then it’s time to double down. Change will come from government, but progress will come from leaders in the patient communities, advocates, caregivers, healthcare systems, and innovative companies that can move beyond our current trend. We only have our health and our lives to improve.

The Future of Your Job: Will You be Automated, or Augmented?

Data Intelligence, Cognitive Bias, and Emerging Tech  

You don’t always realize at the moment of a new technology’s introduction that it was designed to take your job.

Early Bloomberg Terminal

I remember my early career working as an analyst grunt on Wall Street. To learn my job, I would compete with other analysts on a fun game called merger practice. We’d be expected to create a fully merged Profit and Loss statement for two merged companies in 15 minutes, or less.

I had to work between machines. I’d look at the Bloomberg terminal’s company data, piped real time through some sort of non-Internet based system. I’d toggle my head over to my PC, where I’d copy the numbers into Excel to show how two companies would merge together. We’d issue reports fast, faster than other analysts. That was our edge.

Then one day, it was all connected. Market data piped right into Microsoft Excel. It was a true human-centered achievement. Hooray. Time saved. Lives better. I no longer had cramps from all of that neck rotating.

In fact, soon I would not be needed. Who needs a grunt to merge companies fast when that can now be done with a button?

I was lucky. I self-selected out of Wall Street and found myself in more creative and swashbuckling environments like tech startups and design firms and then my own companies after that. I do business modeling for a living, but insist on all of the fuzzy work that needs to happen with humans before we make spreadsheets. I stayed just ahead enough of technology to keep me from being replaced by a button.

Just this week, I saw some tech that called me back to those analyst days, and made me hopeful for data analysts, everywhere.

I was judging the startups at Strata Hadoop World in NYC, the data conference.

At Strata, everyone is an amateur behavioral economist. Humans have bias. Humans aren’t rational. Humans also don’t scale as fast as machines.  In the tutorials and main stage shows, everyone is trying to learn how to use the tools of data science to design human fallibility out of the system.

Startups are focused on delivering automation, to scale faster. Reproducibility was a  big theme, because of all of the pesky human error.

For example, Compellon, the startup who came in second place, seeks to overcome what it calls the trial and error approach to data analytics. The company’s analysis engine aims at eliminating the traditional analytics method of testing data against multiple statistical models. The promise from Compellon: “Not a statistician? Not a problem. Compellon 20|20 was built to deliver answers for business professionals with or without data science skills.”

There’s an equal and opposite trend happening at Strata Hadoop and the edges of technology culture. Tim O’Reilly, the CEO of O’Reilly which runs that Strata conference series, has called innovators to augment humans. “Don’t Replace People. Augment Them. If we let machines put us out of work, it will be because of a failure of imagination and the will to make a better future.”

At the Startup Showcase, a company called Virtual Cove is augmenting financial traders. Virtual Cove is creating mixed reality (augmented reality, virtual reality) to let you see thousands of data points at one time. “In contrast, Virtual Cove’s approach lets your mind absorb combinations simultaneously.  This way, the lock simply opens, insight intuitively revealing itself.”

Once you put on the headset, you can see the entire Nasdaq stock market and 100 of the top companies, each with hundreds of data points. You can get a sense of the visualization in this 2-D image below – but the real benefit is being able to walk around and quickly take in all of that information.

The founder, Bob Levy, points out that that humans have skills that are hard to reproduce in machines. The role of the trader has been decimated by the rise in algorithmic trading. Code and software and data have replaced humans, because they move faster. But the ability to quickly take in sensory data in 3-D form and process all of that information visually could be our saving grace.

Where else could this go? Could we move beyond augmenting our analytical brains and tap into our human desire to feel, to express, to play?

Having had the pleasure of playing with Tilt Brush on the HTC Vive, I could envision a future virtual trading floor of traders hurling iridescent company stock sculptures at each other to make a trade.

I could see a future annual shareholders meeting, with community activists and eco-activists parading their data sculptures of impact in front of the company’s financial performance review.

What do you see as the future of data intelligence? Do you see machines gunning for your job? Are you at risk of being automated, or will you benefit from tech and data-driven augmentation? How are you playing with new technology make a better future?

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Personas, TAM/SAM/TM

Business 101.1 for ITP, Gallatin, Journalism, School of Professional Studies.

You’ll find the current team formation topics and people as of today 9/19/2016.

Contact Jen or Josh with any team changes – or reflect your changes next week.

6 core teams and recent changes in direction:

Fragrances Uber for Yoga

Prisons Social Community for Designers

Ergonomic Furniture

Assistive Tech – Colostomy Bag Assistive Tech, also Mental Health Provider Finder for LGBTQ

Fashion Social Enterprise

Social Listening Metrics Tattoo Artist Match

See you all next Monday

 

Bodies and Buildings Class 1: Intro to Systems Thinking

Have we reached the limits of growth:

[slideshare id=38840063&doc=bodiesandbuildings1nyuitp982014-140908144525-phpapp01]

 

Bodies are in trouble right now – despite reaching the peak of productivity the US now leads the world in the rampant growth of chronic diseases that lower life expectancy, and reduce life quality.

“People are living longer than projected in 1990 — on average, 10.7 more years for men, and 12.6 more years for women. But for many of them, the quality of life during those years is not good. On average, people are plagued by illness or pain during the last 14 years of life.”

Buildings account for the largest source of both electricity consumption (68% of global use) and greenhouse gas emissions (48% of global emissions) in the world. –UNEP.

Purpose of this course:

You are better equipped than MBAs to envision and build our way out of this trap, but often lack an understanding of the mega forces of business, regulation, and bad cultural habits that keep us from saving ourselves.

What we will cover in this course:

  • Meta view
  • Focus on points of intervention
  • Conceptual scaffolding

“Folks who do systems analysis have a great belief in ‘leverage points.’ These are places within a complex system (a corporation, an economy, a living body, a city, an ecosystem) where a small shift in one thing can produce big change in everything .”

Introduction to Donella Meadows, and learning about stocks, flows, and hands on the faucets.

 

 

 

Bodies and Buildings NYU ITP Syllabus for 2014

Bodies and Buildings
Fall 2014 Syllabus
NYU ITP
Instructor: Jen van der Meer
jd1159 at nyu dot edu
Mondays 6:30 – 9:25 PM 721 Broadway at Waverly

Generative Spiral

Why is it so hard to care for our planet and ourselves? We seem hungover from a century of prosperity and ingenuity, unable to invent economic models that create jobs, improve health, and restore the earth. Eager ITP students are better equipped than MBAs to envision and hack our way out of this trap, but often lack an understanding of the mega forces of business, regulation, and bad cultural habits that keep us from saving ourselves. But don’t despair! We’ll get busy, and make things again – but also provide you with conceptual scaffolding upon which to build your world changing ideas.

Our tools of understanding include deep design thinking, and systems thinking. By focusing on two systems in particular: human bodies, and the buildings that humans make, we will examine the environmental and social impacts of the economic systems. Bodies are in trouble right now – despite reaching the peak of productivity the US now leads the world in the rampant growth of chronic diseases that lower life expectancy, and reduced life quality. Buildings are not in enough trouble – they account for the largest source of both electricity consumption (68% of global use) and greenhouse gas emissions (48% of global emissions) in the world.

In this course we will discover what Dana Meadows calls “leverage points” as places to intervene that would transform the system as a whole.

Goals:

This is a lecture course, and the syllabus is built to provide students with a systems thinking approach to problem solving. The objective for the final presentations is for students to generate a concept that can be applied to improve human health, building health, or both. The goal is for students to articulate a solution, and argue persuasively for ideas to become reality (vs. moving straight to working prototype in usual ITP fashion). Assignments will involve in person class presentation, and class participation is required. The course is structured to provide iterative opportunities to build and strengthen ideas – rooted in user-centered design, grounded in the realities of sustainable cost models and growth plans, validated by lean and iterative solution development, and strengthened by students’ ability to stand up and tell their stories.

dna

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Lean Customer Discovery Needs Design Research

When you are in a startup, under the gun, trying to execute – how do you find time for empathy?

Lean launchpad simulates entrepreneurship by requiring founders to get out of the building…and into their customer’s world.

Teams succeed when they start talking to people, and find the magic in actually validating their hypotheses with customers, potential partners, and even fellow founders who may have tried to pursue the same dream. But it’s hard to get underneath.

What we heard:

“I think I only scratched the surface, and never really got to the core problems.”

“I don’t know if my customers really understand what they need enough to articulate it to me.”

“Customers said they would pay, but then they didn’t when it came time to pay.”

The truth is that when you are just TALKING – you fail to yield anything but the obvious facts, the surface level insights. For greater learning, Ajay Revels and I reviewed all of the design research literature. Not all of ethnography or design research is relevant for a startup founder – but there are critical skills and techniques that will radically accelerate your ability to understand the pain for which you are trying to solve.

In this slideshare, we highlight the core techniques we’ve curated from D-School, Steve Portigal’s great source, Interviewing Users, Universal Methods of Design, and Ajay herself from Polite Machines.

Have you used design research techniques have you used to get to the underlying needs of your customers?

8 Principals for Designing for Dignity in Health Tech

Thanks all for the great discussion, in real time at StrataRx and on the Twittersphere.

Is it enough to design for a great patient experience, improved health outcomes, and overall cost reductions in health care? While incentives may soon change, the idea of data-driven solutions to improve health care is not a new one. Yet why have technological solutions so frequently fail on all three of the triple aims? We need to be able to ask deeper questions, and experiment with more humanistic approaches.

Looking at specific interaction examples from incumbents and startups in health tech, I will contrast the current approaches for data-driven solution development, and how they fall short at the moment of interaction. Incumbents deploy top down approaches that comply with regulation, and meet the needs of payers and providers, but famously fail to deliver engaging patient and practitioner experiences. New entrants want to disrupt the entire system, but often struggle to understand deep unmet patient needs, and how to demonstrate evidence-based outcomes.

For each solution born onto the health tech scene, can we ask: Are patient’s lives enhanced by the addition of data? Do doctors become more wise? Do nurses feel more empowered? Do spouses know how to effectively intervene? Do adult children of aging parents get more time in their overly stretched days? And do these collective interactions actually result in improved population health?

This talk will outline an approach to design for a higher aim and enhance the lives of everyone who seeks care from the health care system.

 

Here are the slides:

 

Data is Not a Business Model: Moving Knowledge to Action

I’ll be at Strata: Making Data Work talking about data.

 Big data does not necessarily lead to big business outcomes. It is a rare business leader who even asks the biggest questions of what big data can do.

Everyone is looking for ways to define data as an asset that can be monetized. But data itself will never move the needle for the Fortune 1000. Data is a means to an end. The end is not just insight, or knowledge, or brief moments of wisdom (when marveling at gorgeous data visualizations). The end we seek is wise action.

 

Looking at examples from health care, advertising, open government, publishing, and financial services, I will contrast the current approaches of big data business models with a more innovative, scalable, and effective action-oriented approach.

I will outline the key pitfalls data geeks fall prey to, and how you are most certainly too smart for your own good when talking to us MBAs. I will show how your service can deliver evidence-based decision-making to the people that matter on the front lines, and at the highest levels of the organization. I will also show you how to design data services that get people to care about their jobs, and their contribution to their company goals.

This talk will help anyone who is tasked with determining how to get more business action out of data.

Advocacy: The Power Lever in Performance Brand Marketing

Post over at the Dachis Group Collaboratory upon the launch of Advocate Insight, an analytics app that lives on top of big data platform, Social Business Index.

As far as advocacy is concerned: why now? What happened to the pursuit-du-jour of the early days of social media – Influence? Hint – influence can still provide a multiplier effect to your social efforts, but influence has different properties than advocacy. We’re moving into the next wave of social business, looking at social data, and actually becoming intelligent about how we organize to deliver high performance business outcomes. We’re seeing that what we’ve always known in our hearts – that brands are powered by advocates – is indeed true. Here are five key themes that lead us to the dawn of advocacy in performance brand marketing.

 

1. COMMUNITY MANAGER SCALE #FAIL

Every single social business team is hungry for headcount and legitimacy. Back in the early stage of social maturity adoption, the social team celebrated quick wins and fabulous anecdotes about how they responded to customers, solved issues, and generated leads.

Successful brands that have built large followings – + 5 MM, 10 MM, 15 MM total social footprint size – are fond of saying “be careful what you wish for.” Armed with state-of-the-art command centers and social CMS platforms, these teams have a hard time keeping up with the massive amounts of high touch social service commitments that powered their early rise in size. As these teams argue for greater headcount, they are questioned by the CMOs and CFOs approving their budgets, demanding to see a business case. This business case is hard to justify when an ever increasing social footprint fails to deliver a meaningful return to brand outcomes, and the bottom line.

2. ENGAGEMENT @ SCALE

Advocacy is where engagement at scale happens – with customers, employees, and partners. Successful social business leaders recognize that engagement at scale is only realized when the company is able to move beyond mere fan acquisition tactics and actually cultivate a core community of advocates.

We at Dachis Group have been actively managing advocacy programs for a number of years, and now with the launch of Advocate Insight are seeing in the data what we knew in our gut. Passionate, committed advocates are a key power lever in building your brand. Brands that have the most advocates, online and offline, will ultimately win in the social era. It’s especially interesting to look at all of the players interacting when advocates show up in a brand’s social footprint, in particular:

  • Customer advocates. Brand advocates choose to identify themselves with a brand, publicly support a brand’s efforts, and actively seek out information about products, services, and company news. You know them when you see them: the Red Bull fan, the Apple lover, the lifelong Honda driver. Even people that deny their affiliation for mainstream brands tend to have die-hard affiliations for challenger and newcomer brands, like Whole Foods, Under Armor, and LuluLemon.
  • Employee advocates. Employee advocates are naturally using social media channels to cultivate conversations with customers and partners. While some of these employees are officially sanctioned within the social business team, or certified by a social center of excellence, others haven’t yet gotten that email and are reaching out to help the company, and the brand.
  • Partners. Companies that sell indirect, or who have affiliate, license or franchise business models often rely on these partners as the direct line of communication to customers. With social, these partners become part of the brand’s conversation, as customers actively seek opportunities to connect with the brand. These partner conversations can now be isolated and measured for their advocacy potential.

But what about influencers?

3. THE POINT OF AN INFLUENCER OUTREACH IS ADVOCACY

At Dachis Group we base our understanding of influence on the (big, very big) data that we see. Influencers are different than advocates. Influencers come with a following, they have a direct relationship with groups of people and may exemplify a passion in a specific category – tuning cars, uncovering indie bands, celebrating frugal green lifestyles to name a few.

Influencer measures like Klout and PeerIndex aim to measure the effectiveness of these influencers – who may or may not actually influence ultimate behavior, but who do demonstrate a knack for  growing a following, and whose audience is primed to respond to the influencer’s social content.

Influencer outreach programs can deliver tactical results, and are often chosen to extend the reach of marketing messages served up in social channels. But we would argue that influencer programs are just that – tactical efforts that can be deployed to reach new lifestyle/interest segments, and increase consideration outside of the brand’s own core community. Influencer outreach programs move beyond the tactical and achieve strategic ends when the end result is net new advocates showing up within the brand’s social footprint.

4. GREAT BRANDS GROW BECAUSE THEY CONNECT DEEPLY WITH PEOPLE

Brands with high brand love scores such as Virgin Airlines, Whole Foods, and Coca-Cola may not organize this way, but they have built brands with pull mechanisms that organically draw a large committed following. As these brands adopt for a social age, you’ll see them conscientiously struggle to define what it means to be a beloved brand, and to deliver this kind of meaningful engagement to end customers.

Case in point: two Dachis Group clients at our recent Social Business Summit in Austin, social business leaders like Steve Furman at Discover and Sherri Maxson at US Cellular, both see advocacy as the ultimate reciprocal payoff to social investments. Both of these companies are service providers, and have a commitment to high quality customer standards. Customers, as a result, tend to have a higher referral likelihood than other brands in their category. For these kinds of brands – where the service IS the product – success is achieved through a virtuous loop: commit to core brand values > deliver excellent service > cultivate advocates that share these core values, and refer new likeminded customers. Lather, rinse, repeat.

Brands that suffer a brand experience gap – certain airlines, certain banks, certain telecom providers – will see their brand value diminished in the social age. For these brands, social listening whether rigorously conducted through a listening effort, or glimpsed in quotes in daily google alerts, is the first step in getting these companies to acknowledge the core of the problem – their very reason for being.

Brands that operate from their mission and purpose, whose customers buy not just what they sell, but why they exist, will ultimately win in the social age.

5. WE ALL BECOME PERFORMANCE BRAND MARKETERS

In social, we’re here to enable connection, explore new horizons, and ultimately impact society. To humanize a brand you have to take it back to the core values and then cultivate conversations. To embody the spirit of reciprocity.

The social era is a call to action not just to marketers but to social business practitioners, brand strategists, media planners, designers, technologists, brand managers, copy writers, organizational change experts, customer service experts, the IT organization, the CFO, and the CEO. We all must become performance brand marketers now.

If your curious to take a look at the social data driving your brand’s business graph, you can register for free at socialbusinessindex.com, or sign up for a tour of our Advocate Insight Platform.